Is Starting a Company in Dubai Free Zone Right for You?

adeel April 1, 2022 0 Comments

Dubai free zone companies are top-rated with investors and companies because of their multiple advantages. However, not everyone is aware that Dubai free zone offers start-ups and businesses many benefits, alongside the tax and permit system.

Many investors have already recognized this potential. Numerous foreign companies have invested in Dubai for the favorable tax environment and conditions, which are once again becoming highly sought after. In fact, the free zones constitute an important segment of the Dubai economy and, due to the strict trade regulations, attract businesses from all over the globe.

Moreover, investors should, however, take care not to forget the necessary criteria when enjoying the various benefits since many free zones have made it mandatory for their approved businesses to file annual reports.

Big time! It’s nearly impossible for anyone to keep up with the new companies and find out what’s good or bad in their business.

An expert team of AEY Auditing of Accounts ensures that your company is 100% compliant with both the UAE and international standards.

Taking Assistance of Approved Auditors in the UAE

If you want to conduct an audit of your company, choosing a reliable firm in the UAE is significant. A E Y Auditing of Accounts is among the top reputed and recognized accounting firms in the UAE. Therefore, it assists with Internal audits, Statutory audits, Freezone audits, and many more. Companies that are not successful in significantly delivering the requirement on time will face penalties and difficulties, such as losing their trade license.

Major Free Zones in Dubai, a Legitimate Obligation

Some of the reputed Dubai free zones strictly demand audits of companies. Some of the Dubai free zones are mentioned below:

  • DMCC (Dubai Multi Commodities Centre)
  • DAFZA (Dubai Airport Free Zone)
  • DIFC (Dubai International Financial Centre)
  • JAFZA (Jebel Ali Free Zone)

This article aims to deliver significant information on auditing in Dubai Free zones.

Book-Keeping in Dubai Free Zones

The goal of the startup company is to particularly increase its profit by evaluating business performance. It is the area where accounting and book-keeping play a significant role in its success.

Now, let’s discuss financial record maintenance or bookkeeping services in Dubai free zones regarding auditing.

Firstly, book-keeping is a necessary process in any business. Keeping track of your income and expenses helps you make informed decisions, plan and identify areas where you can reduce costs. Furthermore, it’s important to remember that companies in the UAE are required to keep financial reports for at least five years.

I have specified this condition in several free zones’ implementing regulations. But JAFZA, one of the free zones in Dubai, has stated that the Free Zones companies (FZCO) and Free Zone Establishments (FZE) must maintain financial documents for a minimum of six years.

While book-keeping is essential for your business’s financial health and compliance with rules, keeping track of all your transactions manually is time-consuming and vulnerable to errors. It must be held through registered auditors. During the audit, authorized auditors must have access to the financial statement—meanwhile, the must-have book of accounts according to UAE tax compliance.

Furthermore, companies working in free zones of the UAE will need the assistance of the best audit firm. Among these firms is the A E Y Auditing of Accounts.

What if you don’t Submit an Audit Report?

Businesses registered in the free zones must audit their financial statement each year. If you fail to comply with the free zone compliances in the UAE, you can face severe penalties.

Every free zone company in Dubai must submit an annual audit report. The free zones in Dubai have legislation and regulations that govern activities within the free zone.

They must audit the financial statements of businesses registered in the Free Zones every year. Failure to comply with the regulation by free zone companies in Dubai can result in severe penalties too.

Penalties?

The Free Zone Authority requires all businesses operating within them to submit their financial statements for auditing purposes. Failure to submit the audit report will result in the below penalties:

  • A fine not exceeding AED 2,500 per month for late report submission. (Total fine AED 30,000)
  • A fine not exceeding AED 5,000 per month for failing to maintain proper records. (Total fine AED 60,000)
  • A fine not exceeding AED 10,000 if the company fails to appoint an auditor as the law requires. (Total fine AED 120,000)

It is significant for companies to maintain financial records in the free zone. Furthermore, these companies must take the assistance of an approved auditing firm in the UAE.

You should contact a consultant who can help you with the process or guide you for further queries. We at A E Y Auditing of Accounts have assisted many clients with submitting their audit reports to the relevant authorities.

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